Employers subject to the record-keeping requirements of the federal Occupational Safety and Health Act are reminded to post their 2017 OSHA Form 300A, Summary of Work-Related Injuries and Illnesses, from February 1–April 30, 2018.
OSHA Form 300A lists the total number of job-related injuries and illnesses that occurred during the previous year, and must be posted even if no work-related injuries or illnesses occurred during the year. It should be displayed in a common area where notices to employees are usually posted so that employees are aware of the injuries and illnesses occurring in the workplace. In addition, a company executive must certify that he or she has examined the employer’s OSHA Form 300, Log of Work-Related Injuries and Illnesses, and that he or she reasonably believes—based on his or her knowledge of the process by which the information was recorded—that the OSHA Form 300A is correct and complete.
For more information on the OSHA Form 300A requirement, please click here.
The Internal Revenue Service (IRS) has released IRS Notice 1036, Early Release Copies of the 2018 Percentage Method Tables for Income Tax Withholding. The notice updates the income tax withholding tables for 2018, reflecting changes made by the Tax Cuts and Jobs Act.
Employers should begin using the 2018 withholding tables as soon as possible, but not later than February 15, 2018. The new withholding tables are designed to work with the Forms W-4 that workers have already filed with their employers.
Click here to read IRS Notice 1036
Courtesy of HR Snapshot!
Question: An employee injured themselves while on break and had to be taken to urgent care. Does this injury fall under workers’ compensation even through it occurred during a break?
Answer from Marisa, PHR:
Whenever an employee makes you aware of an injury or accident during the workday or at the workplace, your best course of action is to file a claim with your workers’ compensation carrier. Once the claim is in their system, you can work with the carrier to determine if the claim is valid. If you have concerns, you can (and should) raise them with the carrier.
Once the carrier has the claim and related information, they can analyze the issue and decide whether they want to dispute or negotiate the claim and what benefits will or will not be offered. Like you, they want to control costs, so they will be on your side as circumstances allow.
If the employee does not wish to file a claim, you should still have them complete the claim form to document the incident. You should also be sure to document that the employee declined to file for benefits.
|Marisa has experience working in a wide variety of HR areas, including payroll, staffing, and on-/ off-boarding. She has worked at both national and local companies, in a wide range of businesses and industries. Marisa earned her B.S. in Business Administration and Communications from the University of Oregon. She loves watching football and basketball, volunteering and spending time with her two dogs.
The U.S. Equal Employment Opportunity Commission recently issued Promising Practices for Preventing Harassment, a guidance document that contains harassment prevention recommendations for employers in four broad categories:
- Leadership and accountability;
- Harassment policies;
- Harassment complaint systems; and
- Harassment training.
For each category, the guidance lists numerous actions employers can take. Recommended actions include, for example:
- Allocating sufficient resources for effective harassment prevention strategies;
- Crafting an unequivocal statement that harassment based on, at a minimum, any legally protected characteristic, is prohibited; and
- Conducting regular, interactive, and comprehensive harassment prevention training for all employees.
The document states that while the practices it discusses are not legal requirements under federal employment discrimination laws, they may enhance compliance efforts.
To read the guidance document, click here.
The IRS has released Form 8941, Credit for Small Employer Health Insurance Premiums, and related instructions, for tax year 2017. Eligible small employers use this form to figure the credit for health insurance premiums under the Small Business Health Care Tax Credit.
The Small Business Health Care Tax Credit is designed to encourage small businesses and tax-exempt employers to offer health insurance coverage to their employees. Among other requirements, an employer may be eligible for the credit for tax year 2017 if:
- It had fewer than 25 full-time equivalent employees for the tax year;
- It paid at least 50% of the premium cost for single health care coverage for each employee;
- The average annual wages of its employees for the year were less than $53,000; and
- It paid premiums on behalf of employees enrolled in a qualified health plan offered through a Small Business Health Options Program (SHOP) Marketplace (or qualifies for an exception to this requirement).
Note: Employers in Hawaii cannot claim this credit for insurance premiums paid for health plan years beginning after 2016.
Click here to review Form 8941 and its instructions.
DOL Adopts New Unpaid Intern Test
Last Friday the Department of Labor (DOL) adopted a new test for unpaid interns. Employers should use this test—called the primary beneficiary test—when determining if a worker can be properly classified as an unpaid intern or if they need to be classified as an employee and paid minimum wage and overtime. The test adopted by the DOL has already been in use in four federal appellate courts, most recently the Ninth Circuit Court of Appeals. The DOL’s switch to the primary beneficiary test creates a nationwide standard.
Balancing v. All-or-Nothing
Previously, the DOL was using a six-question all-or-nothing test. An employer needed to be able to say “yes, the internship does that” to all six questions or else classify the worker as an employee. The new test is a balancing (or factors) test and has seven questions. No single question will disqualify the worker from being classified as an unpaid intern. Instead, the employer may look at the answers as a whole.
The New Questions
The new questions overlap significantly with the old questions. The major element missing from the new test is a focus on whether the intern is providing tangible benefit to the employer. The old test indicated that the employer should receive little to no benefit from the services of an unpaid intern, with the exception of goodwill and a qualified future applicant. The new test doesn’t ask if the employer is receiving a benefit.
In place of questions about whether the employer receives any benefits, the new test places more emphasis on the internship being academically focused. Only one of six questions in the old test asked about the training and educational aspects of the job, whereas four of seven do in the new test. Employers are free to look at factors outside of these seven, but should be careful about stretching to find new questions if these seven lead to an answer of “paid employee.”
Under the primary beneficiary test, employers should consider the following:
- The extent to which the intern and the employer clearly understand that there is no expectation of compensation. Any promise of compensation, express or implied, suggests that the intern is an employee.
- The extent to which the internship provides training that would be similar to that which would be given in an educational environment, including the clinical and other hands-on training provided by educational institutions.
- The extent to which the internship is tied to the intern’s formal education program by integrated coursework or the receipt of academic credit.
- The extent to which the internship accommodates the intern’s academic commitments by corresponding to the academic calendar.
- The extent to which the internship’s duration is limited to the period in which the internship provides the intern with beneficial learning.
- The extent to which the intern’s work complements, rather than displaces, the work of paid employees while providing significant educational benefits to the intern.
- The extent to which the intern and the employer understand that the internship is conducted without entitlement to a paid job at the conclusion of the internship.
Employers subject to the Affordable Care Act’s (ACA) information reporting requirements are reminded that the deadline to furnish Forms 1095-B and 1095-C are quickly approaching. The reporting deadlines in 2018 are for reporting information on the 2017 calendar year, and are as follows:
- Applicable large employers (ALEs)—generally those with 50 or more full-time employees, including full-time equivalents—must furnish a Form 1095-C to all full-time employees by March 2, 2018.
- Self-insuring employers that are not considered ALEs, and other parties that provide minimum essential coverage, must furnish a Form 1095-B to responsible individuals (which may be the primary insured, employee, former employee, or other related person named on the application) by March 2, 2018.
The Internal Revenue Service (IRS) has issued the 2018 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, or medical purposes.
2018 Standard Mileage Rates
Beginning on January 1, 2018, the standard mileage rates for the use of a car, van, pickup, or panel truck will be:
- 54.5 cents per mile for all business miles driven (up 1 cent from 2017)
- 18 cents per mile driven for medical purposes (up 1 cent from 2017)
- 14 cents per mile driven in service of charitable organizations (unchanged from 2017)
Taxpayers always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates.
IRS Notice 2018-03 contains additional information about mileage rates.
The IRS has released guidance further clarifying the rules regulating qualified small employer health reimbursement arrangements (QSEHRAs). QSEHRAs—which are health reimbursement arrangements exempt from the Affordable Care Act’s market reforms—may be offered by employers with fewer than 50 full-time equivalent employees that do not offer a group health plan to any of its employees to reimburse employees for medical expenses, including individual health insurance policy premiums.
Highlights of the guidance are as follows:
- Written Notice Deadline: An employer that provides a QSEHRA during 2017 or 2018 must generally furnish its initial written notice to its eligible employees by the later of (a) February 19, 2018, or(b) 90 days before the first day of the plan year of the QSEHRA. Q&A #38 of the guidance explains what information must be included in the notice.
- “Same Terms” Requirement: Employers are required to provide the QSEHRA on the same terms to all eligible employees. However, the guidance states that QSEHRA payments or reimbursements may vary based on the age of covered individuals or the number of individuals covered in accordance with the variation in the price of an insurance policy in a relevant individual health insurance market.
- Form W-2 & PCORI Requirements: An employee’s permitted benefit under a QSEHRA must be reported in box 12 of his or her Form W-2 using code FF. In addition, QSEHRA sponsors are subject to the Patient-Centered Outcome Research Institute (PCORI) fee, which generally requires them to file Form 720, Quarterly Federal Excise Tax Return, annually by July 31 of the year following the last day of the plan year.
Click here to read the IRS guidance in its entirety.
Employers that hire seasonal workers this holiday season are reminded that there is an exception when measuring workforce size to determine whether they are an applicable large employer (ALE) subject to the Affordable Care Act’s employer shared responsibility (“pay or play”) and corresponding information reporting provisions.
Seasonal Worker Exception
If an employer’s workforce exceeds 50 full-time employees (including full-time equivalent employees) for 120 days or less (or 4 calendar months) during the preceding calendar year, and the employees in excess of 50 who were employed during that period were seasonal workers, the employer is not considered an ALE for the current calendar year. A seasonal worker for this purpose is an employee who performs labor or services on a seasonal basis (e.g., retail workers employed exclusively during holiday seasons are seasonal workers).
Seasonal Worker Versus Seasonal Employee
While the terms “seasonal worker” and “seasonal employee” are both used in the pay or play provisions, only the term “seasonal worker” is relevant for determining whether an employer is considered an ALE. For this purpose, employers may apply a reasonable, good faith interpretation of the term “seasonal worker.” For more information on the difference between a seasonal worker and a seasonal employee under pay or play, please refer to IRS Pay or Play Q&A #26.
The IRS has announced that it will begin mailing employers letters informing them of their potential liability for a “pay or play” penalty for the 2015 calendar year in late 2017. However, before any penalty is assessed and notice and demand for payment is made, employers will have an opportunity to respond to the agency.
What Will the Letter Contain?
The IRS plans to issue Letter 226J to applicable large employers (ALEs)—generally those with at least 50 full-time employees, including full-time equivalent employees, on average during the prior year—if it determines that, for at least one month in the year, one or more of the ALE’s full-time employees was enrolled in a qualified health plan for which a premium tax credit was allowed (and the ALE did not qualify for an affordability safe harbor or other relief for the employee). Letter 226J will include, among other things:
- A penalty payment summary table, itemizing the proposed payment by month;
- An “employee premium tax credit list” which lists, by month, the ALE’s employees who for at least one month in the year were full-time employees allowed a premium tax credit and for whom the ALE did not qualify for an affordability safe harbor or other relief;
- A description of the actions the ALE should take if it agrees or disagrees with the proposed penalty payment; and
- A response form.
The response to Letter 226J will be due by the response date shown on the letter, which generally will be 30 days from the date of Letter 226J. Letter 226J will also contain the name and contact information of a specific IRS employee that the ALE should contact if the ALE has questions about the letter.
How Does an ALE Make a Pay or Play Penalty Payment?
If, after correspondence between the ALE and the IRS, the IRS determines that an ALE is liable for a penalty payment, the IRS will assess the payment and issue a notice and demand for payment, Notice CP 220J. That notice will instruct the ALE on how to make a payment, if any. Notably, an ALE will not be required to include a payment on any tax return that it files or make a payment before notice and demand for payment.
Click here for more information from the IRS.
The IRS recently announced an increase in the applicable dollar amount used to determine the Patient-Centered Outcomes Research Institute (PCORI) fee for plan years that end on or after October 1, 2017 and before October 1, 2018. As a reminder, employers sponsoring certain self-insured plans are responsible for the PCORI fee.
For plan years ending on or after October 1, 2017 and before October 1, 2018, the fee for an employer sponsoring an applicable self-insured plan is $2.39, multiplied by the average number of lives covered under the plan. PCORI fees for plan years that end between October 1, 2017 and December 31, 2017 will be due to the IRS in July 2018.
Click here to read the IRS notice announcing the increase. Details on how to determine the average number of lives covered under a plan are included in these regulations.
The IRS recently released its 2017 Form 8027, Employer’s Annual Information Return of Tip Income and Allocated Tips. This form generally must be filed by employers who operate large food or beverage establishments. A large food or beverage establishment is a food or beverage operation:
- That is located in the 50 states or in the District of Columbia;
- Where tipping of food or beverage employees by customers is customary; and
- Whose employer normally employed more than 10 employees on a typical business day during the preceding calendar year.
Form 8027 (and Form 8027-T, to be used when filing more than one paper Form 8027) must be filed by February 28, 2018. However, if an employer files electronically, the due date is April 2, 2018. Employers required to file 250 or more Forms 8027 must file electronically.
Click here for more information and instructions.
The IRS has announced that the contribution limits for health flexible spending arrangements (health FSAs), qualified small employer health reimbursement arrangements (QSEHRAs), and 401(k) retirement plans will increase in 2018 as follows:
- Health FSAs: The annual dollar limit on employee contributions to employer-sponsored health FSAs will be $2,650(up from $2,600 for 2017).
- QSEHRAs: The total amount of payments and reimbursements by the employer will not be permitted to exceed $5,050 per employee(up from $4,950 for 2017) or $10,250 per family (up from $10,000 for 2017).
- 401(k) Plans: The contribution limit for employees who participate in 401(k) plans will be $18,500 (up from $18,000 for 2017). The catch-up contribution limit for those aged 50 and over will remain unchanged at $6,000.
For more information on these and other new tax benefit limits, please see IRS Revenue Procedure 2017-58 and IRS Notice 2017-64.
The Internal Revenue Service (IRS) has released the final forms and instructions for Forms 1094 and 1095 for calendar year 2017 reporting. Employers are required to report in early 2018 for calendar year 2017.
2017 Forms and Instructions
The following calendar year 2017 reporting forms and instructions are now available:
Information Reporting Deadlines
The deadlines for submitting Forms 1094 and 1095 are as follows:
- Applicable large employers (ALEs)—generally those with 50 or more full-time employees, including full-time equivalent employees (FTEs)—must file Forms 1094-C and 1095-C with the IRS no later than February 28, 2018 (or April 2, 2018, if filing electronically). ALEs must also furnish a Form 1095-C to all full-time employees by January 31, 2018.
- Self-insuring employers that are not considered ALEs must file Forms 1094-B and 1095-B with the IRS no later than February 28, 2018 (or April 2, 2018, if filing electronically). A Form 1095-B must also be furnished to “responsible individuals” (who may be the primary insured, employee, former employee, or other related person named on the application) by January 31, 2018.
The IRS has issued an urgent warning about a new email phishing scam that uses IRS and FBI emblems to entice users into clicking a link to download a fake FBI questionnaire. The link downloads ransomware, which prevents users from accessing data from their devices unless they pay the scammers.
The IRS advises victims of the scheme not to pay the ransom, as hackers often fail to provide access to the data that is held “hostage” even after being paid. According to the agency, people with a tax issue will not get their first contact from the IRS with a threatening email or phone call, nor does the IRS use email, text messages, or social media to discuss personal tax issues.
The IRS advises victims to immediately report any ransomware attempt or attack to the FBI at the Internet Crime Complaint Center, IC3.gov, and forward any IRS-themed scams to firstname.lastname@example.org.
To read the IRS warning in its entirety, and to see a sample phishing email, click here.
Keeping good records not only makes tax filing easier and faster, but it can also help you monitor the progress of your business, prepare your financial statements, and support items reported on your tax returns. Here are three simple tips from the IRS to help you get organized:
1. Save Certain Business Records
The following are some of the types of records you should keep:
- Gross receipts are the income you receive from your business. You should keep supporting documents that show the amounts and sources of your gross receipts.
- Purchases are the items you buy and resell to customers. Your supporting documents should show the amount paid and that the amount was for purchases.
- Expenses are the costs you incur (other than purchases) to carry on your business. Your supporting documents should show the amount paid and a description showing that the amount was for a business expense.
- Assets are the property, such as machinery and furniture, that you own and use in your business. You need records to compute the annual depreciation and the gain or loss when you sell the assets.
2. Keep Employment Tax Records
The following information should be available for IRS review:
- Your employer identification number (EIN);
- Amounts and dates of all wage, annuity, and pension payments;
- Amounts of tips reported;
- The fair market value of in-kind wages paid;
- Names, addresses, social security numbers, and occupations of employees and recipients;
- Any employee copies of Forms W-2 that were returned to you as undeliverable;
- Dates of employment;
- Periods for which employees and recipients were paid while absent due to sickness or injury and the amount and weekly rate of payments you or third-party payers made to them;
- Copies of employees’ and recipients’ income tax withholding allowance certificates;
- Dates and amounts of tax deposits you made;
- Copies of returns filed;
- Records of allocated tips; and
- Records of fringe benefits provided, including substantiation.
3. Store and Organize Your Records
Business owners should generally keep all employment-related tax records for at least 4
years after the date that the tax becomes due, or after the tax is paid, whichever is later. The length of time you should keep other documents depends on the action, expense, or event which the document records.
For more information on other federal recordkeeping responsibilities for employers contact an Expert today!
The U.S. Equal Employment Opportunity Commission (EEOC) has announced that the upcoming EEO-1 reporting form will not contain pay data collection information.
EEO-1 Report Change Halted
In July of 2016, the EEOC changed the EEO-1 reporting form requirements, so that private employers with 100 or more employees and certain federal contractors would have been required to report aggregate W-2 income by sex, race, ethnicity, and job group. On August 29, 2017, this change was halted by the U.S. Office of Management and Budget (OMB). Instead, employers should plan to comply with the March 2018 EEO-1 reporting deadline by using the previously approved EEO-1 form.
The EEO-1 report is a compliance survey report mandated by federal law. It generally must be filed by:
- Private employers with 100 or more employees (or fewer than 100 employees if the company is owned by or corporately affiliated with another company and the entire enterprise employs a total of 100 or more employees); and
- Federal contractors (private employers) subject to Executive Order 11246 who have 50 or more employees and:
- Are prime contractors or first-tier subcontractors, and have a contract, subcontract, or purchase order amounting to $50,000 or more; or
- Serve as a depository of government funds in any amount; or
- Are a financial institution which is an issuing and paying agent for U.S. Savings Bonds and Notes.
Contact an Expert today for more information on the EEO-1 Report!
A recently released IRS letter reaffirms the agency’s view that funds from a health flexible spending arrangement (health FSA) may not be used to reimburse health insurance premium payments or Medicare premium expenses.
Certain Premiums May be Deducted
The IRS letter points out that health insurance premium payments, including those for Medicare, may qualify for purposes of the itemized deduction for medical expenses. However, only premiums for which the taxpayer is not claiming a separate credit or deduction can be included as part of a medical expenses deduction. Additional restrictions apply to this deduction. For more information, please see IRS Publication 502, Medical and Dental Expenses.
Click here to read the IRS letter in its entirety.